How do I calculate the input tax correctly?
March 19, 2023 | 40,00 EUR | answered by Georg Nitsche
Dear tax consultant,
I am facing the challenge of correctly calculating the input tax and urgently need your help. I run a small business in the online trading sector and have little experience with input tax calculation so far. The current situation is such that I have no clear idea of how to correctly calculate the input tax and whether I may have made mistakes.
My concerns are that I fear that I may have claimed too much or too little input tax and could therefore get into trouble with the tax office. Additionally, I want to ensure that I do not miss out on any tax benefits and run my business as efficiently as possible.
Could you please explain to me step by step how to correctly calculate the input tax and what documents I need for this? Are there any particular things I should pay special attention to? Are there perhaps software or tools that can help me with the input tax calculation?
I thank you in advance for your support and look forward to hearing from you.
Sincerely,
Daniel Lehmann
Dear Mr. Lehmann,
Thank you for your inquiry regarding the calculation of input tax. I understand that this can be a complex topic, especially if you do not have much experience with it. It is important to calculate input tax correctly in order to avoid potential errors and to optimize tax benefits.
First of all, I would like to explain what input tax actually is. Input tax is the value added tax that you, as a business owner, pay on your purchases. You can deduct this input tax from the value added tax that you receive from your customers. The difference between the input tax paid and the output tax received is either paid to the tax authorities or refunded.
To calculate input tax correctly, you need to subtract the value added tax you pay on your purchases from the value added tax you charge on your sales. You need to collect all purchase invoices that show the value added tax, add up this total, and then subtract the value added tax you charge on your sales invoices.
It is important to keep all your receipts well organized, as the tax authorities may want to see them in case of an audit. Documents you may need for calculating input tax include purchase invoices, sales invoices, bank statements, and possibly contracts with suppliers and customers.
There are various software and tools that can help you with calculating input tax. It is important to choose a reliable and user-friendly software that can assist you with organizing and calculating your taxes. Some well-known programs include DATEV and Lexware.
In conclusion, it is important to calculate input tax correctly in order to avoid potential errors and to optimize tax benefits. With the right software and good organization, you should be able to calculate input tax correctly. If you have any further questions or need assistance, I am happy to help.
Best regards,
Georg Nitsche
